Feature Article
May 17, 2004
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UPS & FedEx Compete to Deliver

Got a package? With UPS on the ground and FedEx in the air, your delivery woes seem solved. But UPS and FedEx want to break out of their earth bound roles and ascend to the loftier position of supply chain enabler.

Both have recently re-branded to deliver their new positioning. Is the marketplace getting their messsage?

Recently dubbed the "World's Most Admired" company in a Fortune magazine survey, UPS ranks as one of the world's best known service brands, dominating the ground shipping business in more than 200 countries and territories. But UPS is on a mission to let the world know it delivers in more ways than one. To draw attention to its lesser-known offerings such as supply chain management, multi-modal transportation and financial services, UPS engaged in a brand overhaul, tackling one of the largest roll outs in business history to unify the identity of all of its entities. So how does a brand that’s earned such lofty accolades master the art of reinvention?

“UPS, well known for its package delivery expertise, was not well known in other areas,” says Steve Holmes, spokesperson for UPS. “We first built the capabilities, and then we began repositioning our brand to reflect those offerings. To do otherwise would be to make a hallow promise, which would damage the brand rather than strengthen it. We wanted everyone to stop and take another look at UPS and discover the surprising new things we offer.”

To reflect UPS’ broader scope of business dealings, the company’s 40-year old “shield” logo was streamlined, losing the packaging imagery. Extensive research determined that the color brown was instantly identified with UPS and could stand alone as the springboard for reinvention.

“What we found was that not even we – brown-bleeding UPS’ers – had completely understood the power of ‘brown’ and the connection audiences have with it,” Holmes relates. “After considering several concepts, we found that both the color and the term ‘brown’ was a powerful tool that had a very positive connection when associated with UPS. We found that brown signifies trust and reliability, so customers believe in our capability to accomplish things beyond package delivery for them. This is the essence of the question, ‘What can brown do for you?’ The answer is, ‘A whole lot more than you realized.’ ”

Nick Wreden, author of FusionBranding, thinks that the UPS overhaul is on the right track. “In general, I don't like question tags,” he says. “Asking: ‘What Can Brown Do For You’ risks the answer, ‘Well, hell if I know.’ But the campaign is smart to leverage the ubiquity of UPS’s brown trucks and brown uniforms.”

To help explain what brown can do, UPS has adopted “Synchronizing the world of commerce” as its new slogan. “Synchronized commerce is the precise, coordinated movement of the three primary elements of trade – goods, information and funds,” explains Holmes. “As a trusted broker between millions of buyers and sellers each day, UPS is in a unique position to help manage and balance the supply and demand cycles among trading partners around the world. When customers understand the expanded capabilities of UPS, they begin to understand the concept of synchronized commerce and they want to know more.”

Changing the perception of a brand has to work from the inside out. “The concern was that UPS’ers must clearly understand and embrace the brand positioning of the company, and most of those 360,000 employees have spent their careers focused on the package shipping business. We knew it would be difficult to change mindsets about the vision of the company, but they’ve exemplified their adoption of the new brand positioning through the way they are working with each other in a team approach across business units to better serve customers.”

The brand now covers over 4,000 retail locations, with more than 1,000 operating outside the brand’s home country, the United States. The acquisition of Mail Boxes Etc. in 2001 was instrumental in establishing a UPS storefront with global reach. Now known as “The UPS Store,” these locations aim to host an amalgamation of advanced technological offerings, such as Wi-Fi “hot spot” technology, to appeal to passers by conducting business on the fly.

“The re-branding of Mail Boxes Etc. has also been a phenomenal example of the power of the UPS brand and customers’ hunger for more convenient retail services,” elaborates Holmes. “This not only extends UPS’ brand presence from the delivery vehicle to the storefront, but it also provides yet another access channel to offer expanded services beyond basic shipping to customers.”

Has the new brown approach succeeded in establishing an emotional connection with the public? “Our results from the launch of the brown campaign through the company’s overall re-branding in 2003, to now, show that the initiative is definitely making a difference,” says Holmes. “Our target audiences, which include multiple segments from the shipping room to the boardroom, are beginning to look at UPS in a different way than ever before.”

Meanwhile across town, competitor FedEx is also anxious to inform the world of its shipping capabilities. Having recently launched a large marketing campaign to gnaw at UPS’ ground-delivery business, the folks at FedEx are invested in getting the word out about newly expanded capabilities. To raise global awareness of its portfolio of transportation, e-commerce and business services, FedEx has implemented a color-coded nomenclature and adopted FedEx prefix titles in a re-branding initiative with the similar goal of uniting their entities.

In what appears to be a copycat move, FedEx recently acquired Kinkos, a chain with 1,200 locations in 10 countries known mostly for copying services, to provide a global storefront to compete with The UPS Store. The newly re-branded FedEx Kinko's Office and Print Centers were created to provide a "one-stop" shop where people can conduct business on the go, offering traditional FedEx shipping services as well as an array of convenient tech offerings such as video conferencing, high-speed wireless and wired Internet access.

Wreden comments, “UPS for ground; FedEx for air -- I'd bet that's the shorthand brand image for most. What's interesting [is] that it's not the brand that either wants. FedEx and UPS have the same vision to become every company's -- and even individual's -- outsourced supply chain enabler. They both want to be known as the soup-to-nuts logistics company, handling everything from a simple cross-town delivery to returns to advanced worldwide supply chains that connect factories in Asia with stores on Main Street.”

As both brands vie for the same territory, each can be expected to hold on to its area of expertise – at least for the time being. “Overall, FedEx is more entrepreneurial; UPS has the stronger culture,” says Wreden. “UPS has the much stronger balance sheet, but FedEx has stronger brand visibility. This is a battle worth watching, not because of dueling ad campaigns but because both companies fundamentally understand what branding is all about. It's key to remember that branding is ever so much more than tag lines and logo changes. It is their ability to execute, not a new logo or slogan, that will enable them to move beyond their identity. Both companies are masters at the game, and any other company would do well to learn from both.”

Vivian Manning-Schaffel is a freelance writer who lives and works in Brooklyn, NY.

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